Fintech Update, 8/24 - 8/30
Hi! It's Monday, August 31, 2020.
Dear readers - please note that we will be off next week in observance of Labor Day. Don’t worry - we’ll be back with a mega update two weeks from now so you won’t miss a fintech beat!
Leading Off
Ant Group shared financial and operational data for the first time ahead of its upcoming IPO. // ConsenSys agreed to acquire JP Morgan’s blockchain platform, Quorum. // In other news, WordRemit agreed to acquire remittance firm Sendwave for $500M; Finix extended its Series B, raising an additional $30M; Visa unveiled a powerful deep-learning AI tool that can approve or decline credit and debit transactions on behalf of banks whose own networks are down; and Fidelity’s president field paperwork with the SEC regarding a new bitcoin fund. // This + more below!
Heavy Hitters
Ant gets up and at ‘em, files IPO paperwork. Chinese fintech giant Ant Group filed pre-IPO documents in Hong Kong and Shanghai, taking its first big step toward making a public offering on China’s two largest exchanges. The paperwork included the first “detailed look at key company financials” that investors have seen, which included eye-popping 2019 numbers like $17 billion in revenue, $16 trillion in transaction volume via Alipay, $290 billion in credit to individuals and small businesses, and $500 billion in investments. The company’s selection of Chinese exchanges was seen by some as a symptom of the current relationship between the US and China, while Ant has highlighted that it will allow the company to “capitalize on the interest of local investors” (a reported 900 million Chinese use Ant’s Alipay platform). Ant’s price target is uncertain, but certainly will aim to increase the company’s valuation over its $150 billion valuation as of two years ago.
ConsenSys acquires Quorum. The New York-based blockchain firm purchased Quorum, the “marquee blockchain platform” launched in 2016 by JPMorgan Chase. According to the terms of the deal, JPMorgan also made an undisclosed investment in ConsenSys and will be a ConsenSys customer going forward. In addition, the bank’s high-profile JPMCoin project, which JPMorgan built on top of Quorum, will remain with Quorum, supported by ConsenSys.
Quick Takes
Citi’s software switch that resulted in a $900M misfire. After a money transfer to a group of hedge funds went awry – Citi accidentally wired $900 million to creditors of Revlon, last week – an internal review found that human error and “obscure,” out-of-date software were to blame. The story illustrates the prevalence of legacy bank systems, the challenges they pose, and difficulties of replacing them.
ECB comments on FS cloud services. The European Central Bank (ECB) issued a paper cautioning firms on the risks posed by relying on cloud services provided by US “Big Tech.” Such reliance, the ECB paper noted, could lead to “possible concentration issues at both entity and systemic levels.” The ECB has supported efforts to foster a EU-based alternative to American cloud providers, to limited success so far.
Ribbit Capital targets $350M with “blank check” IPO. The investment firm, which has built a substantial portfolio of crypto, blockchain, is planning to debut its LEAP Special-Purpose Acquisition Company (SPAC) on the NYSE, targeting a $350 million raise at a valuation over $500 million. The SPAC will target potential fintech firms for acquisition.
Fidelity files with SEC for new bitcoin fund. The wealth management firm filed paperwork with the Securities and Exchange Commission informing them of the launch of Wise Origin Bitcoin Index Fund I, a new fund composed of investments in Bitcoin reportedly aimed at institutional investors.
Visa unveils AI tool for approving card transactions. The global payments giant is rolling out an advanced, deep-learning application that can approve or decline credit and debit transactions on behalf of banks experiencing network disruptions.
Nerdwallet acquires Know Your Money. The financial advisory platform expanded its global reach by purchasing the UK-based Know Your Money, which provides similar financial product information and comparison tools to UK customers.
WorldRemit to acquire Sendwave for $500M. The online money transfer firm agreed to acquire the African remittance firm in a cash and stock deal worth more than $500 million, valuing the combined company at over $1.5 billion.
Finix extends Series B. The fintech, which helps startups implement their own in-house payment processing infrastructure, extended its Series B funding with an additional $30 million, bringing the total Series B to $75 million and the firm’s total venture funding up to $96 million.
Pop Flies
Esusu raised $2.3M in seed funding to provide financial solutions for low-to-middle income consumers.
Acorns investors Dwayne ‘The Rock’ Johnson and Dany Garcia sponsored a program encouraging families to begin investing early for their children’s future.
Social investing platform Commonstock raised $9.7M in seed funding to democratize investment knowledge.
Digital bank startup Copper raised $4.3M in seed funding to teach teens how to make smart financial decisions.
Social stock-trading app Public received a seven-figure check from Scott Galloway.